Public Sector Struggles To Achieve IT Savings

Public sector organisations are struggling to make the cuts to their IT budgets proposed in the coalition government’s Comprehensive Spending Review last year, according to new research.

In a survey of 102 senior public sector finance officers carried out by ComRes, on behalf of VMware, more than two thirds (69 percent) said that the cuts would be difficult to achieve within the proposed three-year time scale.

On average, public sector financial chiefs have implemented just nine percent of the planned £3.6 billion cuts to IT spending during the first five months of the programme, with more than half of the organisations in question yet to even begin.

IT is strategically important

One of the main reasons for this slow progress, according to VMware’s UK managing director Mark Newton, is that many public sector bosses regard IT as of strategic importance, not only for achieving cuts in other areas but also for implementing organisational change.

“We’re seeing a major shift in the way IT is perceived in the public sector,” said Newton in a statement. “This research clearly shows that financial decision makers recognise that smart allocation of IT spending and resources can make a fundamental impact on their organisation.”

He said that the public sector should look to cloud computing as an “enabler for shared services,” claiming that IT would play an increasingly crucial role in the delivery of public sector services. However, the company’s advice on how to drive forward these changes, while simultaneously making cuts, was somewhat hazy.

At a roundtable event in London today, the IT representative of the Tory-led Hillingdon Council, Roger Bearpark, was on hand to discuss the findings of the report. Bearpark explained that the council already runs its own ‘Hillingdon Cloud’, which enables the organisation to free up resources and reduce IT expenses, allowing funds to go back into delivering front-line services.

He said that the government spending cuts had acted as a catalyst for the council to implement a “leaner meaner strategy”, and should be viewed not as a threat but an opportunity, even if that meant “forcing the hand” of organisations that are resistant to change.

Improving efficiency

The role of IT in helping the public sector achieve savings was acknowledged by the government when the CSR was announced in October 2010, and Chancellor George Osborne highlighted the potential of technology to modernise public services and reduce waste.

However, the cancellation and failure of several high-profile IT projects, including ID cards and the NHS National Programme for IT, has dampened the enthusiasm of many public sector organisations. A report be the Institute for Government earlier this month found that, despite government IT projects costing the tax payer around £16 billion per year, the “glacial pace” of procurement and implementation is resulting in repeated system-wide failures.

Georgina O’Toole, research director and public sector specialist at TechMarketView, highlighted that many public sector organisations still view IT as a drain on resources, with around 80 percent of IT budgets being spent on maintaining existing infrastructure. She said that, while initiatives involving shared services tend to take off more quickly in local government, there is still a great amount of confusion about “how to do things smarter” in central government.

Her analysis was backed up by statistics in the report, which revealed that only 73 percent of financial decision makers believe that IT is integral to cost cutting efforts – leaving more than a quarter of public sector CFOs floundering when it comes to implementing IT cost savings.